Current trend

During the Asian session, the USD/CHF pair is slightly declining, retreating from the highs of August 20, renewed at the end of last week with the support of American macroeconomic statistics.

The September nonfarm payrolls increased from 159.0K (revised from 142.0K) to 254.0K, although analysts expected 140.0K. Average hourly earnings accelerated from 3.9% to 4.0% YoY, contrary to forecasts of a slowdown to 3.8%, slowing from 0.5% to 0.4% MoM against estimates of 0.3%, and the unemployment rate changed from 4.2% to 4.1%. The data lowered expectations for a –50 basis point adjustment in the Fed’s interest rate at its November meeting, with the Chicago Mercantile Exchange (CME) FedWatch Instrument now putting the probability of such a move at 25.0–30.0%, down from 60.0% the week before last.

Switzerland’s unemployment rate accelerated from 2.5% to 2.6% in September, while markets had expected little or no change. The consumer price index fell from 1.1% to 0.8% YoY and by 0.3% MoM after being flat in August, raising the possibility that Swiss National Bank officials will cut their already low borrowing costs again. However, Swiss National Bank Governor Martin Schlegel said on Tuesday that inflation in the country was supported by rising utility costs and rents. Meanwhile, wage growth has stabilized below the upper limit of the central bank’s inflation target of 0.0–2.0%.

Support and resistance

On the daily chart, Bollinger Bands are growing moderately: the price range is expanding but not as fast as the “bullish” activity at the end of last week. The MACD indicator is rising, maintaining a strong buy signal (the histogram is above the signal line), and is trying to consolidate above the zero mark. Stochastic approached the highs, reversed into a horizontal plane, indicating that the American dollar may become overbought in the ultra-short term.

Resistance levels: 0.8600, 0.8630, 0.8673, 0.8700.

Support levels: 0.8570, 0.8541, 0.8517, 0.8500.

Trading tips

Short positions may be opened after a confident breakout of the 0.8570 level downwards, with the target at 0.8517. Stop loss — 0.8600. Implementation period: 1–2 days.

Long positions may be opened after a rebound from the 0.8570 level and a breakout of the 0.8600 level upwards, with the target at 0.8673. Stop loss — 0.8570.